Abbott breaking another promise on university funding: Labor

Labor says the government will break another election promise if it pursues plans to open $6 billion of university funding to private sector competition.

Labor higher education spokesman Kim Carr said that would mean less money for students of existing institutions, which the government clearly promised it wouldn't do before the election.

News Ltd newspapers have reported that the government is considering opening the $6 billion Commonwealth Grants Scheme to private institutions and non-university institutions such as TAFE colleges.

Currently there are just three private universities in Australia. That compares with the US where a fifth of all students attend private universities, including some of the country's most esteemed institutions.

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Senator Carr said Education Minister Christopher Pyne was planning to use a report by former coalition minister David Kemp as an excuse to break its election promise to make no cuts to education.

"Day after day we see government-inspired speculation aimed at softening the Australian people for what will be a clear and unequivocal breach of their election commitments," he told reporters in Melbourne.

Senator Carr said taking up Dr Kemp's proposals could only mean less money for students and an increased burden on universities.

"There is no doubt in my mind that this is the government's agenda," he said.

Government parliamentary secretary Josh Frydenberg said the Liberal Party was a party of deregulation which encouraged competition.

"And if we can do that in the tertiary education space, for example providing more space for TAFEs, then we will do that," he told Sky News.

"We do believe that private universities can play an important role. They are not to substitute the role of publicly-funded universities. We want to encourage both systems at the same time."